Starknet Foundation Transparency Problems on General Assembly Event

🏛 Governance
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1

About Us

ITU Blockchain stands as the first and biggest university-based blockchain community in Turkey. ITU Blockchain serves as a delegate in numerous protocols, each time operating independently for specific proposals. Starknet is one of the protocols that we currently hold 2.56M delegate tokens of voting power.

Background

Recently, TobbyKitty, a member of the Builder Council, announced that he will no longer support Starknet. Then the Lambda Class team announced, we couldn’t add a link because the tweet was deleted, that they would be leaving Starknet entirely. Thereupon, another Builder Council member, Sylve, suggested that a team of 40 people gather under the General Assembly after discussing these issues.

General Assembly Details

Sylve shared the proposal of the General Assembly event in the Core Stars group. The proposal is included as a Google Docs. He also created a Telegram group so that people can give feedback.

Also in the shared proposal “Accommodation, food, transportation, are covered by the Starknet Foundation.” phrase is included. It is also stated in the proposal that the event will not have any recordings or live broadcasts.

Problems and Questions

How these costs were met was asked in the Telegram group set up for the event. In the shared articles, it was revealed that the Starknet Foundation only has STRK tokens. In response, Sylve and Oli (a.k.a. Odin Free) said that the Starknet Foundation has fiat money loans.

We request that the following questions be answered, assuming that the Starknet Foundation should be completely transparent, and we welcome your contribution to the discussion.

  • Why wasn’t an event for which costs will be covered by the Starknet Foundation not shared on the forum? Why not seek governance approval to cover these costs?
  • Is the Starknet Foundation a legal entity?
  • If a fiat money loan was taken, what was used as collateral?
  • Where were the assets shown as collateral transferred to Starknet Foundation?
  • Is there any financial relationship between Starknet Foundation and StarkWare?
  • Has Starknet Foundation ever sold STRK tokens live on Ethereum via OTC for this event?
  • Were STRK tokens used collaterally to obtain fiat money loans?

We think that the answers to all these questions should be answered by the management team within the Starknet Foundation. We need to achieve this transparency if we want to make Starknet more decentralized and neutral.

2

Hello hello,

Henri here, from the Starknet foundation.
First, a few words on how the foundation is structured. The foundation consists of two main bodies:

  • Its board, that has 7 members (See here who they are)
  • Its employees, that are around 10, with Diego Oliva as the CEO (see him presenting at StarknetCC in July)

The current structure is that the employees act day-to-day on behalf of the foundation. And the board controls and makes strategic decisions for the actions of the foundation.

Let’s address your questions

Why wasn’t an event for which costs will be covered by the Starknet Foundation not shared on the forum? Why not seek governance approval to cover these costs?

The mandate of the foundation is to advance the starknet ecosystem; one way of doing this is to sponsor events. The foundation sponsored various conferences, and will sponsor many more (a StarknetCC event in Istanbul, for example). It does not need to request approval for this on the community forum.
That being said - point taken. The community forum is an important place for the community, and we’ll do our best to have events be annouced there once they are finalized.

Is the Starknet Foundation a legal entity?

Yes

If a fiat money loan was taken, what was used as collateral?
Where were the assets shown as collateral transferred to Starknet Foundation?
Has Starknet Foundation ever sold STRK tokens live on Ethereum via OTC for this event?
Were STRK tokens used collaterally to obtain fiat money loans?
Is there any financial relationship between Starknet Foundation and StarkWare?

The Starknet foundation is private entity. It is not a public entity; it is not bound by any law to disclose anything about its finance, structure, processes and so on. Financial details around the activity of the foundation are not public. This is pretty standard in the realm of foundations.

While the foundation is striving for transparency and accountability, it also strives for efficiency. You should not assume everything will be transparent, and that all your questions will be answered. The current mechanism in place (the board controls the actions of the foundation) is standard for companies and foundations, and is designed to maximize efficiency and accountability. The foundation needs to be able to deliver on key aspects, on its own initiative, without consulting each and every external party.

Similarly, the event mentioned above (the assembly) is not a governance body. It has no power of decision. It is a way for the foundation to engage with builders and hear their concern, and figure out what can be done to serve the community better.
We know that this will give us only a partial view - 40 people can not represent a full ecosystem. But we believe it will give us something, and that this is better than nothing.

3

Hey Henri, firstly thanks for response.

We agree with what you said. We think that community calls should be increased more and active participation should be ensured. Thank you also for paying attention and supporting this point.

We do not expect the Foundation to share all its operations publicly. There is no example of this in other protocols anyway.

But we would like to give an example through Arbitrum, one of the protocols of which we are a delegate. As can be seen in AIP-1.1, one of Governance’s first proposals, the Foundation’s operational budget can be shared with the community. Additionally, Transparency Reports may be published by the Foundation. In this way, we can more accurately decide which side we will support in the vote based on our materialistic perspective in the proposals we will vote on.

We invite other Foundation members and delegates to express their opinions on this topic. We believe that this is a topic that requires brainstorming.

4

Transparency is the most fundamental feature for all DAOs. So I understand the concerns of ITU blockchain and support them.
I think the Starknet team will consider the issues ITU have mentioned.
Thanks, ITU and Starknet Team for your kindness and cooperation on the compatability.

5

Hello Henri, if you would please close my account. I don’t have access to the original email I signed up with, if cancellations are usually done through that route. I’m no longer interested in participating in Starknet.